U.S. Bancorp Q3 2026 Revenue Hits Record on Fees and Margin Growth

U.S. Bancorp (NYSE: USB) reported record net revenue for the third quarter of 2026 as loan and deposit growth, a wider net interest margin and broad-based fee momentum lifted earnings. A full quarter of revenue from BTIG added to capital-markets growth, while the bank’s efficiency ratio improved despite higher acquisition-related, compensation and technology expenses.

Net income attributable to the company rose 10.0% from a year earlier to $2.20 billion. Diluted earnings per share increased 9.8% to $1.34, though it declined slightly from $1.35 in the second quarter. A provision associated with acquired loans reduced third-quarter EPS by $0.07; excluding that provision, diluted EPS was $1.41 on a non-GAAP basis.

Total net revenue reached $7.97 billion, up 8.7% year over year. Operating income increased 11.0% to $3.48 billion, while the provision for credit losses rose 14.5% to $654 million.

Lending, deposits and margin support interest income

Net interest income on a taxable-equivalent basis increased 5.6% from a year earlier and 2.3% sequentially to $4.49 billion. U.S. Bancorp attributed the gains to loan and deposit growth, an improved earning-asset mix and the repricing of fixed assets. The taxable-equivalent net interest margin expanded to 2.84%, up 9 basis points year over year and 5 basis points from the second quarter.

Average loans totaled $409.5 billion, rising 8.0% from the prior-year period and 1.0% sequentially. Growth was concentrated in areas including commercial real estate, credit cards and other retail lending. Average credit-card loans rose 11.5% year over year to $40.2 billion, including the effect of an acquired small-business card portfolio.

Average deposits increased 2.9% year over year and 2.2% from the second quarter to $526.6 billion. The total cost of deposits was 1.88%, up from 1.81% in the prior quarter but below 2.05% a year earlier. Management said relationship deposit growth continued to support the bank’s funding position.

Fee businesses and BTIG drive revenue growth

Fee revenue rose 14.9% to $3.55 billion. Excluding BTIG, fee revenue increased 7.6% on a non-GAAP basis, indicating that growth extended beyond the acquisition.

Capital-markets revenue climbed 69.3% to $640 million, including $223 million from BTIG. Excluding BTIG, capital-markets revenue grew 10%. Trust and investment-management fees increased 9.9%, investment-product fees rose 19.6%, and consolidated payments fees advanced 5.7%. Mortgage-banking revenue was a weak spot, falling 13.9% to $155 million.

BTIG contributed $226 million of total fee revenue and $213 million of noninterest expense during the quarter. U.S. Bancorp is seeking to expand the combined capital-markets platform through cross-selling between BTIG and the bank’s clients, product expansion and new investment-banking capabilities. The company expects BTIG to add about $200 million of quarterly net revenue.

The bank also highlighted its small-business franchise, which serves more than 2 million businesses. Average small-business loans increased 11% year over year to $18 billion, deposits rose 2% to $45 billion and related fees grew 9% to $223 million. Corporate payments and treasury-management fee revenue increased 12.3% to $457 million.

Expenses rise, but efficiency improves

Noninterest expense increased 7.1% to $4.49 billion, reflecting BTIG, higher compensation and benefits, increased technology and communications spending, and higher marketing costs. Excluding BTIG, expenses rose 2.0% on a non-GAAP basis.

Revenue growth outpaced the increase in expenses, producing 240 basis points of positive operating leverage, or 440 basis points excluding BTIG. The non-GAAP efficiency ratio improved to 55.9% from 57.2% a year earlier and 57.1% in the second quarter. Return on average assets was 1.25%, while non-GAAP return on tangible common equity was 18.5%, both within or consistent with the company’s medium-term target ranges.

Credit metrics improve as capital remains stable

Nonperforming assets declined 20.0% year over year to $1.32 billion, equal to 0.32% of period-end loans plus other real estate owned. The net charge-off ratio improved to 0.51% from 0.56% a year earlier and 0.53% in the previous quarter. Commercial real estate nonperforming loans continued to decline as the bank resolved troubled office loans.

Credit-card net charge-offs decreased to 3.29%, while 30- to 89-day delinquencies rose to 1.35%. The company attributed the delinquency movement to the onboarding of the acquired small-business card portfolio and seasonal factors.

U.S. Bancorp’s common equity tier 1 ratio remained at 10.8%. Including accumulated other comprehensive income, the non-GAAP CET1 ratio declined to 9.1% from 9.4% in the second quarter. Risk-weighted assets increased by $12 billion, partly because of the one-time onboarding of a large co-brand partnership, while higher Treasury yields and wider credit spreads affected accumulated other comprehensive income. The company said those unusual third-quarter capital demands were not expected to recur.

Fourth-quarter and full-year outlook

For the fourth quarter, management expects taxable-equivalent net interest income to increase 6% to 7% from $4.31 billion a year earlier. Fee revenue is projected to rise 13% to 14% from $3.05 billion, while noninterest expense is expected to increase about 8% from $4.23 billion.

For full-year 2026, U.S. Bancorp expects total net revenue to grow 8% to 9% from $28.7 billion, or 6% to 7% excluding BTIG. The company projects about 300 basis points of positive operating leverage, increasing to roughly 400 basis points when BTIG is excluded. The presentation compared those forecasts with prior revenue-growth ranges of 7% to 9%, or 5% to 7% excluding BTIG, and prior operating-leverage expectations of about 200 basis points, or more than 300 basis points excluding BTIG.

The outlook remains subject to economic conditions, interest-rate changes, credit quality, regulatory and capital requirements, cybersecurity and operational risks, and the execution and integration of the BTIG acquisition. U.S. Bancorp also identified commercial real estate conditions, unemployment, trade policy and broader financial-market volatility as potential sources of uncertainty.